How Smart Home devices work in India and the infrastructure behind it

Mr. Bhanu Sharma, who's been building and living with smart home setups for close to a decade, puts the fragmentation problem simply: try teaching your 65-year-old parents to use eight different apps just to run their own home. 

The third problem is where the data goes.

All Tuya-powered devices report back to Tuya's cloud. According to Tuya's own app privacy policy, the data collected when you connect a device includes your WiFi information (SSID, BSSID, MAC address), device IDs, IP addresses, and approximate geographical location. Usage data, including when devices are activated, how they're used, and how often, is collected continuously. For smart cameras, surveillance footage is uploaded to the cloud automatically.

The concern isn't that Tuya is doing something illegal. The concern is structural. Tuya is headquartered in Hangzhou, China. China's Data Security Law, enacted in June 2021, legally requires Chinese companies to cooperate with government data requests on matters of national security. As cybersecurity researcher Klon Kitchen of the American Enterprise Institute told VOA News, "Tuya doesn't have to be incompetent or malicious to be a threat; it only needs to be compliant with Chinese law."

Mr Akshay Mishra of DSPworks.in, another OEM in the Indian IoT stack, trying to do it the right way, frames the problem differently: "You inherit a security posture. You don't choose one." You can't audit the firmware, can't choose where data routes, and can't run the device without accepting both.

Tuya maintains that user data is assigned to regional data centres operating independently. But the legal obligation remains. And for a household running a dozen Tuya-powered devices, the behavioural data being generated- when you wake up, when you leave, which rooms are occupied- is the kind of pattern data that, aggregated across millions of homes, has value far beyond switching a light on and off.

This is a similar structural concern that drove the Indian government to push STQC and BIS certification for CCTV cameras. Chinese infrastructure embedded in Indian homes, with data flowing through Chinese-controlled servers. The smart home market is walking the same path, just a few years behind the surveillance industry.

Take a step back and look at the pattern. The ecosystem that serves Indian smart homes is optimised for exactly one thing: price. Not reliability, not interoperability, not security. Just price. Every device reporting to the same cloud, every command leaving the country, every routine logged on servers you didn't choose. It's a Big Boss set, except nobody told the contestants they were on the show.

The obvious fix is to buy more expensive, better-quality devices. But that only tells part of the story. The deeper problem is the protocol and not the price. The architecture of these devices determines whether they work locally or rely on a cloud server in another country. And that's where a standard called ‘Matter’ enters the picture.

So what does "using good tech" look like?

A protocol called Matter, that's designed to fix both fragmentation and cloud dependency. It was started in 2019 as Project Connected Home over IP, (Project CHIP) and was renamed/ rebranded as Matter in 2021. Matter is an open IoT standard backed by Apple, Google, Amazon, and Samsung through the Connectivity Standards Alliance. It lets devices from different brands communicate natively with each other in any compatible app, without a shared cloud. And it's built for local-first control: a Matter device connected to a Thread or WiFi network, you can control the data, its flow, and its location. You can choose if it is shared or not.